Can someone please explain to me the difference between Adept, Expert and Master level? Do I get more XP? What becomes more difficult? etc etc

XP doesn't work like Fallout. However technically you do, since it takes longer to kill things. Therefore you're using your skills more, which in turn results in your skills progressing more.
But enemies will kick your ass more and more.

So you'll actually level up faster per dungeon on master? That seems a bit odd.

Only because you are swinging your weapon or casting spells more.

I played Dark Souls and Demons Souls. Game was very hard but at times fun. Would going from Adept to Expert make the game a bit more difficult but NOT take away the fun that "adept" provides. I don't want to get angry and frustrated like I did on Demons Souls and Dark Souls. Challenging and rewarding but at times just tedious and boring and repetitive.

Skyrim and dark/demon souls =two different games.

There's really no way to make Skyrim as difficult as Demon's Souls. Master is a stiff challenge though.

Does the enemy AI change at all, do they gain more spells and/or higher level spells or is it purely a % increase in their damage & health?

I found that the difficulty scaling is really poorly and even lazily done. It is simply an increase in damage and health for enemies. I played Adept on my first playthrough and found some parts to be quite challenging as a thief/assassin character (dragon priests, some dragons, hargravens) but then I started a new character at Master and got flogged constantly. I went straight to the Thieves Guild quests, and it literally took me 40 minutes just to kill the two guys at the start of the Ratway so that I could even make it to the Ragged Flagon. Once I got to the meadery quest with the Skeevers, and found out that taking on more than two at once (as I often had to do) meant certain death for me, I just gave up and put it back to Adept. As as an average, run of the mill character with no enchanting, smithing, alchemy etc to speak of, Master is frustratingly difficult.

It makes the AI have more health and higher damage.

Interesting, I guess this would bias skills like sneak and illusion though, sit back and frenzy the buffed NPC's to attack and kill each other ? Do followers gain increased %dmg etc or is it purely aggressive npc's

Sneak is incredibly helpful... sniping enemies off with a bow is sometimes the only way you can clear a room without being stomped.

Me: *Fires arrow into master level NPC*

Enemy: "Hey what was that..." *gets up, looks around...finds nothing* "hmm must have been my imagination" *walks back to patrol path with arrow between shoulder blades and bleeding out onto floor*

Its basically just more enemy damage and hp. Which is extremely tedious.

I wish on master combat was extremely lethal and had actual challenge instead of tedium. Enemies and the player should both give and take a lot of damage and die quick.

If you played Demons/Dark Souls then Master difficulty is a cake walk unless you go full [censored] with your build.

Exactly this. Right now Master is just artificial difficulty. The player doesn't have to play any better, they just have to chug more potions.